International bank withdraws from the bidding, leaving big four bank as frontrunner
Dutch bank ING has dropped out of the race to snap up Citi’s Australia and New Zealand banking business – leaving National Australia Bank as the likely frontrunner to acquire the operation, which includes a $4.1 billion Australian residential mortgage book.
ING had been seen as the frontrunner to snap up the business, but recently fell behind, according to a report by The Australian.
ING’s exit could clear the way for NAB, which confirmed to the ASX on Tuesday that it was in talks to buy Citi’s operation.
“Following media speculation, NAB confirms it is in discussions with Citigroup about the potential acquisition of its Australian consumer business,” the bank said. “NAB regularly assesses opportunities to acquire businesses that support its growth strategy in core banking markets. There is no certainty these discussions will lead to a transaction.”
A spokeswoman for Citi confirmed the discussions but told The Sydney Morning Herald that the completion of any deal would be subject to various regulatory approvals. It’s likely that any purchase of Citi’s assets by a big-four bank would attract the attention of the Australian Competition and Consumer Commission, the Herald reported.
The potential deal comes on the heels of NAB’s acquisition of neobank 86 400, a transaction aimed at boosting its appeal with younger customers and bolstering its digital subsidiary, UBank.
Read more: NAB enters race to snap up Citi operations
Citi has about 1.8 million customers and a market share of around 12%, according to the Herald. That makes it the fifth-largest operator in Australia, behind Commonwealth Bank, Westpac, NAB and ANZ Bank.
Citi’s Australian retail banking operation includes a residential mortgage book of $4.1 billion and an investor housing book of $2.44 billion. Those would be of particular interest to NAB, as its proportion of earnings from mortgages is lower than the other three major banks.